Private Label Gains on National Brands

During a recent shopping trip at Giant Eagle, I couldn’t help but be impressed with just how far the private label segment has come. The packaging, the messaging and even the displays have the same look and feel as a leading national brand. The private labels today even have a prominent presence in print, on-air and social media platforms. In fact, many private label lines have created brand power as strong as some traditional household names. Boy, how far we’ve come.

I still remember the introduction of “generic products.” Giant Eagle had a couple dedicated aisles lined with black and white packages donning no graphics. Shoppers could save money buying these products, but also had to deal with the fact that the quality was going to be lacking. Still, many consumers bought from this “generic” aisle because household finances were tight. Purchasing was all about the trade-off back then — save at the checkout and sacrifice on taste or performance. Times were tough and frankly, consumers really didn’t have a choice.

Unfortunately, we find ourselves living in similar economic times today. And the impact is sobering. SymphonyIRI Group reports that 23 percent of consumers are having trouble affording groceries. The study also reports that a large majority of consumers are expecting costs to deteriorate even further in the coming year. Shoppers will yet again have to make some tough decisions. Many need to cut back at the market to ensure bills can be paid and the gas tank is full. As further proof, eating three square meals a day is being replaced by healthy snacking and shopping (and in many cases living) “smart” is becoming the norm.

Fortunately, consumers have become quite resilient and discovered ways to stretch the almighty dollar without over compromising. With the Internet, social media, direct one-to-one marketing campaigns and websites like Groupon, pre-planning has never been stronger or easier. The days of making a once-a-week shopping trip to a favorite retail chain has been replaced with short trips to multiple grocery chains, drug stores and “one stop shops” such as Walmart and Target. Interestingly, many consumers still make a final decision at the point of purchase by choosing from among a “pre-approved” list of brands. And that list now includes private labels, a new brand of acceptable quality and value.

And in these challenging times, private label will continue to be a formidable competitor. But Retailers aren’t just sitting back. By utilizing Shopper Marketing data, Retailers are seizing the moment to bring private label to new categories, including a growing line of natural and organic selections. Shoppers can find a private label brand for everything from Greek yogurt and Hummus to organic pizza. Consumers want healthier choices and Retailers will continue to address those needs as well. And you can bet it will be presented with sustainability and elegance in mind. Not in black and white.

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About Bob Innes

Who am I and what I do best!
I am a skilled Sales and Marketing team player known for performing behind the scenes miracles that increase base distribution, improve customer relationship management, exceed annual sales volume,and profitability for Consumer Packaged Goods companies. And I've been doing it for over 15 years.
My successful contributions include such clients as Kraft Foods, Mars, Bumble Bee Foods, Unilever, Johnson and Johnson and SC Johnson, and JM Smuckers.